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FTC restrictions on behavioural tracking cause concern for CRM

23rd Aug 2010
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Analyst opinion is divided about the potential impact that restrictions on online tracking would have on CRM and online marketing efforts.

The US Federal Trade Commission is about to propose voluntary measures intended to curb online privacy abuses, but is also believed to be exploring whether to mandate consumer opt-outs for online behavioural tracking.

The agency is currently in the process of preparing a report, which is due to be released this autumn and will include guidelines for consumer privacy protection. Recent congressional testimony from FTC chairman Jon Leibowitz suggested that the agency also favours the introduction of measures such as a browser-based 'do-not-track' mechanism similar to the 'do-not-call' list intended to rein in telemarketers.

But analyst opinion is mixed as to the potential impact of any such moves on CRM and online marketing efforts.

Gareth Herschel, an analyst at Gartner, told that he did not think marketers had much to worry about. "It's difficult to see how the FTC would implement such a scheme, but the devil will be in the detail," he said.

Herschel indicated that companies already doing business with customers could still continue to call them even if they were on a do-not-call list, but the situation simply became unwieldy in the online world. The fact that consumers were implicitly agreeing to such relationships made the introduction of tracking restrictions problematic, he added.

In the CRM world, meanwhile, the issue is that if customers' details already reside in brands' databases, they are likely to have either purchased goods or have expressed an interest in doing so, which again implies that a relationship between the two exists.

"The eventual impact of FTC action could be non-existent," Herschel said. "Most reputable companies provide opt-out schemes so why legislate a best practice? In addition, users can use their browser options to prevent tracking via cookies."

But James Kobielus, a Forrester analyst, disagreed. "From the perspective of CRM vendors and users, this FTC plan, if implemented, could become a critical requirement – privacy controls governing behavioural analytics data collection. But that wouldn't necessarily be a huge stretch beyond what they're doing now," he said.

Nonetheless, he believes that many users might simply choose to ignore any opt-out regulations. "Given the many customer service-relevant advantages of continuing to collect, mine and leverage click-streams and other behavioural data such as personalisation, geo-location and social-network influence analysis, it's likely that many, if not most, users would continue to want companies to collect this info on themselves and wouldn't request that it not be tracked in any major way," Kobelius said.


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